Economic and Risk Analysis Comparison of Cotton Tillage Systems with Different Irrigation Levels

Identifying management practices that conserve and protect water resources while improving economics returns and reducing economic risk are very important to a wide variety of stakeholders within the semiarid environment. The southern US Great Plains region is facing challenges due to the declining water resources. An economically efficient irrigation system and cropping practice that save soil moisture, reduce wind and water soil erosion is significant valuable for the region.

The objective of this study was to develop an economic and risk comparison between conventional tillage, reduce tillage, no-tillage, and no-tillage with cover crops for different water management strategies in Vernon, Texas. Cotton production results from previous treatments done for 11 years (2008 to 2018) at the Texas A&M Research Center located in Vernon, Texas, are going to be use in this analysis.

Empirical distributions of net income for each system under risk will be simulated using a Monte Carlo simulation model given each system production data distribution (yields) during the 11 years, changes in cost, and prices. Certainty equivalents would be used to rank the irrigation and tillage systems that could be used to rank risky alternatives for risk averse decision makers. Preliminary results indicate that net returns are higher with no-till systems when compared with conventional systems, specially at low and medium irrigated levels.